Despite the significant public health impact due to prevalent chronic diseases, investment in drug R&D to treat these conditions—other than cancer—remains insufficient. Kirsten Axelsen, an independent consultant and visiting scholar at the American Enterprise Institute, offered a primer on the economics of drug development, with a focus on factors that influence investment decisions. Russ Paulsen, chief operating officer of UsAgainstAlzheimer’s, described some of the investment challenges using AD as a case study. Jason Mellad, CEO and founder of Start Codon, an accelerator in the United Kingdom, offered some suggestions for overcoming resistance to investing in prevalent chronic diseases, including a focus on early detection and on underserved populations. Ken Ehlert, chief scientific officer of UnitedHealth Group, argued for the value of approaching the diagnosis and treatment of prevalent chronic diseases in ways that take individual patients into account.
To set the stage, Susan Schaeffer, president and CEO of the Patients’ Academy for Research Advocacy, provided some context on funding and incentives for innovation in drug R&D for prevalent chronic diseases. She showed a figure illustrating the investigational products in drug development (see Figure 4-1). As shown, the largest percentage of products in development are for cancer (30 percent), while relatively small percentages of products are in development for indications encompassing most prevalent chronic diseases (neurology at 12 percent; autoimmune, would include rheumatoid and osteoarthritis, at 7 percent; endocrine/metabolic, would include programs for obesity and diabetes, at 6.4 percent; and cardiovascular indications at 3.8 percent).
Schaeffer listed a few reasons why relatively few drugs are in development for chronic diseases:
- A lack of biomarkers for measuring disease progression and measuring the progress in clinical trials;
- Inadequate animal models or other preclinical tools for interrogating the disease;
- A lack of sensitive endpoints that can be used to tell if the treatment is effective; and
- An inability to detect the disease at the earliest stages when it may be easier to intervene.
However, she noted there are a few cases in which interest and investment in the treatment of a chronic disease have suddenly increased. She mentioned two cases that could offer insights for boosting innovation for other chronic diseases: one case in which there was an increase in private investments in retinal diseases that took place in the mid-2000s, and a second case, which came a decade later, in which there was an increase in investments—mostly from new companies—working on hearing loss. Schaeffer described two factors that contributed to driving increased investment and attention.
First, biological discoveries opened up new targets and new pathways for intervention. In the case of ophthalmic disease, Schaeffer said, it was work with angiogenesis and vascular endothelial growth factor (VEGF), a protein that promotes the growth of new blood vessels. In hearing loss, the
new discoveries centered on pathways related to the restoration of ribbon synapses for the regeneration of hair cells and drug delivery technologies that made it possible to deliver and retain drugs in the middle or inner ear.
Second, there were few treatment alternatives in these diseases so investors believed the return on investment would be favorable for new treatments in these areas. Conversely, Schaeffer said, if there is a belief that it will be difficult to get reimbursed for a new treatment, there tends to be less interest from venture capital firms supporting early-stage research or less interest from pharmaceutical companies in investing in later development, both of which can affect overall levels of basic research into the biologic basis of diseases. There is an opportunity to intervene at each of these stages of R&D and overcome the resistance to investment.
Axelsen offered a broad view of the considerations that shape investment decisions for drug development. Fundamentally, she said, drug development decisions balance the cost versus the likely benefit—including improved outcomes for patients and return on investment for drug sponsors—of developing a particular drug for a particular disease, with the potential market size for the drug being a crucial factor. Additionally, low-income and minority populations, who are disproportionately affected by chronic diseases, tend to be undertreated and fewer resources are directed toward their health care. She recognized that the business calculations may be at odds with the burden of disease.
Axelsen laid out several factors contributing to increased costs for developing drugs to treat prevalent chronic diseases:
- There is a lack of investment in basic science for understanding the underlying biology of prevalent chronic diseases, which has limited genotyping for subpopulation prioritization and target identification for drug discovery.
- There is a lack of standardized metrics for environmental factors that contribute to chronic disease burden. Other than smoking and body mass index, few tools are available for incorporating environmental factors in clinical trials.
- Prevalent chronic diseases tend to have higher incidence rates among low-income and minority populations, who are more likely to receive care through primary care providers rather than specialists who may be more likely to identify and treat their specific conditions.
- Chronic disease patients often have multiple comorbidities, which add complexities to clinical trial design and implementation and further complicate patient treatment and care.
One area in which there has been some progress in finding treatments for chronic diseases is gene therapy, Axelsen said. For example, significant investment has been made in gene therapies for the treatment of hemophilia and sickle cell disease. However, she acknowledged that gene therapies tend to be expensive, and the proliferation of high-cost therapies for multiple chronic conditions may not be sustainable for the health system.
A more practical approach may be to look to the broad array of low-cost therapies that are already available to treat chronic disease, such as statins and antihypertensive drugs. Even though generic drugs are available, poor adherence remains a problem. She suggested there may be value in more investment to understand the behavioral and financial incentives needed to encourage and support patient adherence.
In closing, Axelsen pointed to the rapid development of COVID-19 vaccines, which was spurred by a confluence of factors needed for rapid drug development: a belief that a market for the intervention exists, a mechanism for reimbursement, regulatory flexibility, and governments willing to pay for it.
Paulsen offered his perspective on funding for developing treatments for prevalent chronic diseases by discussing why it has been difficult to innovate in one particular chronic disease: AD. According to CDC, AD is the only disease among the top 10 causes of death for which there is no effective treatment. It affects about 5.8 million people in the United States today, and the rate is expected to roughly triple by 2060 (CDC, 2020). Costs for AD care make up a massive share of the Medicaid and Medicare budgets (Wong, 2020), he said. In short, there is a massive potential market for an effective AD treatment, Paulsen said. Yet, at the time of the workshop, a treatment for AD had not been approved in decades,1 and a preventative drug has never been approved.
Barriers to Innovation in Drug Research and Development for Alzheimer’s Disease
Paulsen suggested that one reason that innovation in drug R&D for AD has been limited is the acceptance that the disease, similar to other
1 In June 2021, FDA approved the use of aducanumab for treatment of AD under the accelerated approval pathway. For more information, see https://www.fda.gov/drugs/postmarketdrug-safety-information-patients-and-providers/aducanumab-marketed-aduhelm-information (accessed July 15, 2021).
chronic diseases, is just a part of the aging process, which has resulted in less urgency to find treatments.
To gather better information and focus efforts, UsAgainstAlzheimer’s, an advocacy and research-focused organization, asked AD patients what mattered to them about the disease.2 What symptoms would they like to avoid? What abilities are most important to maintain? The results showed that AD patients cared most about outcomes associated with emotional well-being (e.g., not feeling depressed; not feeling like a burden to others). Many of the concerns raised by patients related to neuropsychiatric symptoms, which clinical researchers have not typically used as a primary endpoint in clinical trials.
Because AD is a neurodegenerative disease, there are no effective animal models. Furthermore, there are no simple, widely available biomarkers for AD, which makes it challenging to recruit and verify eligibility of participants for clinical trials. Paulsen noted that positron emission tomography (PET) scans or lumbar punctures can reveal the underlying pathology of AD, but these tend to be expensive procedures and are not widely available.
Knowledge de-risks the development of new drugs and diagnostics, and investment follows, which has worked for some therapeutic areas, Paulsen said. However, for AD and other prevalent chronic diseases, limited understanding of the underlying biology and lack of good biomarkers have made it difficult to get funding at all stages of R&D. He noted that fewer than 1 in every 100 AD drugs that are tested actually succeed (Cummings et al., 2019), compared to the industry average, which is around 1 in 12 (DiMasi et al., 2016). The pool of resources is finite, and allocating those resources to disease areas like AD, which face underlying challenges throughout R&D, is a difficult decision to make, he said. Ultimately, he suggested, the solution may be for the U.S. government to step in with a program like the one it has for orphan drugs, encouraging investments in research.
Mellad shared his perspective as an investor in early-stage startups in therapeutics, diagnostics, and early detection. He observed that “If you look at the figures for the unmet need and the size of market for most chronic diseases, you would actually think on the surface that it is an ideal space for us to be operating in.” More than 55 percent of people over the age of 65 in the United States have two or more chronic diseases (CDC, 2015). Yet, with the exception of cancer, pharmaceutical companies and
2 For more information, see https://www.usagainstalzheimers.org/press/new-usagainstalzheimers-research-shows-what-matters-most-patients-and-caregivers-drug (accessed July 19, 2021).
investors are not pursuing drug R&D programs that meet the needs of populations suffering from prevalent chronic diseases.
In looking for ways to fight disease, including chronic disease, Mellad pointed to the “innovation trinity” of early detection, prevention, and cure. Investment in the oncology space has clearly demonstrated the value of early detection—the earlier a cancer is detected, the easier it is to treat and the longer a patient is likely to survive (see Box 4-1).
Mellad acknowledged that risk aversion and bottlenecks associated with translational research—few research efforts actually translate into a clinical product—are widely recognized as barriers to innovation. Research programs fail for a variety of reasons, often related to unanticipated side effects, low tolerability of the drug, and so on, but Mellad said he believes many of these could be circumvented in ways that could encourage more investment in startups focused on innovative products.
One of the major trends Mellad sees is the shift toward personalized health care. Efforts to spur drug development for rare diseases have pio-
neered this approach. The government played an important role by enacting the Orphan Drug Act, which provided incentives for innovations to treat rare diseases. There is now an infrastructure in place that can address narrower and narrower populations. Mellad suggested that this model could be applied to the chronic disease space. That said, investors would need to be convinced to back companies that can effectively fine-tune their approach to a narrowly defined population; payers would need to be willing to reimburse for a personalized therapy or diagnostic; and providers would need to be convinced that an intervention would work for a defined set of patients. As an example, he mentioned a company, Enhanc3D Genomics,3 that has found ways to unlock the information in GWAS to identify novel druggable pathways for chronic diseases. “We are sitting on a treasure trove of novel genes and pathways that could be targeted to treat these disorders,” he said. “I think that is going to engender a renaissance when it comes to new disease targets.”
For diseases with established genetic and epigenetic underpinnings, such as familial hypercholesterolemia, widespread screening and early detection could enable earlier intervention and provide opportunity for improving the understanding of biomarkers, Mellad suggested. Additionally, these approaches could enable better stratification of disease subtypes, allowing for more effective treatments for patients. For example, Mellad proposed that early screening for familial hypercholesterolemia—a chronic disease that underpins cardiovascular disorders—could enable early intervention and better stratified patients when they present to the clinic for treatment.
Ehlert used a single chronic diseases, obesity, as a case study to map out a philosophical approach to the development of drugs to diagnose and treat prevalent chronic diseases. Between 1990 and 2018, the percentage of the U.S. adult population that is obese grew from about 10 percent to 42.4 percent (CDC, 2021, n.d.), which presents a major strain on the health care system. Obesity can lead to a number of comorbidities, including diabetes, chronic kidney disease, and heart disease. Indeed, Ehlert said, as the baby boomer generation ages, statistics are showing a significant reduction in life expectancy, in large part related to chronic diseases (DuGoff et al., 2014).
When considering how to address prevalent chronic diseases, such as obesity, more effectively and at a lower cost, Ehlert agreed with other workshop speakers that early intervention is best to slow the progression of
disease or prevent it altogether, sparing patients from the worst symptoms, and dramatically lowering associated health care costs.
Effectively diagnosing and treating a complex disease, such as obesity, and its related health effects requires understanding the disease on an individual level, which typically means having a reliable lab test or biomarker. For example, A1C, which is a test for blood glucose levels used to diagnose and monitor diabetes, could be useful for monitoring and treating obesity. However, Ehlert pointed out that lowering the blood glucose levels in individuals has not had great success in treating other chronic conditions associated with obesity, such as cardiovascular disease and kidney disease.
A better approach, Ehlert suggested, might be to study early biological effects and look for more appropriate biomarkers for early stages of disease that better capture disease complexity. Perhaps there are deeper, more fundamental factors that could serve as the basis for early-warning biomarkers—factors that could give an indication of early disease progression.
When considering approaches to cut costs and development time for drug R&D, Ehlert suggested that developers and other stakeholders in R&D move beyond thinking in terms of trying to treat 30 percent of the market with one therapy and instead find ways to treat segments of the population. For example, large pragmatic trials that include participants with comorbidities who are taking multiple medications, he said, could lead to a better clinical understanding at the time of marketing approval for how new treatments can best be used in individual patients. If researchers could find the right biomarkers to capture the different processes going on inside individuals, he said, it may be possible to “radically alter how approvals happen, how clinical use gets adjudicated in the market, [and] whether or not a payer is actually willing to pay for it.”
CDC (Centers for Disease Control and Prevention). 2015. Percent of U.S. adults 55 and over with chronic conditions. https://www.cdc.gov/nchs/health_policy/adult_chronic_conditions.htm (accessed July 6, 2021).
CDC. 2020. Alzheimer’s disease and related dementias. https://www.cdc.gov/aging/aginginfo/alzheimers.htm (accessed June 22, 2021).
CDC. 2021. Adult obesity facts. https://www.cdc.gov/obesity/data/adult.html (accessed July 19, 2021).
CDC. n.d. Obesity trends among U.S. adults between 1985 and 2006. https://www.cdc.gov/nccdphp/dnpa/obesity/trend/maps/obesity_trends_2006.pdf (accessed July 19, 2021).
Cummings, J., H. H. Feldman, and P. Scheltens. 2019. The “rights” of precision drug development for Alzheimer’s disease. Alzheimer’s Research & Therapy 11:76. https://alzres.biomedcentral.com/articles/10.1186/s13195-019-0529-5 (accessed June 22, 2021).
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Knowles, J. W., D. J. Rader, and M. J. Khoury. 2017. Cascade screening for familial hypercholesterolemia and the use of genetic testing. JAMA 318(4):381–382.
Wong, W. 2020. Economic burden of Alzheimer disease and managed care considerations. The American Journal of Managed Care 26(8 Suppl):S177–S183.